Thursday, June 25, 2015

Where Are the Stocks Going?

If it seems like there aren't that many stocks to pick from any more, there's a reason for that. The U.S. now has half as many publicly listed companies trading on its exchanges as it did at the peak in 1996, according to a recent report from the National Bureau of Economic Research shows. Listed companies peaked at 7,322 in 1996, but that number today is down almost by half, to 3,700.

There are two forces at work. There has been a high number of delistings, which the researchers figured account for roughly 46 percent of the decline. The relatively low number of new listings - much less than on foreign exchanges - is estimated to account for 54 percent of the drop. 

From 1997 to 2012, the U.S. had 8,327 companies get delisted. The biggest reason? Mergers.  Of those more than 8000 stocks that disappeared from the markets, 4,957 were due to companies merging with other companies.

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